[GJM] The Just Third Way vs. Socialism in Latin America

Tue Feb 12 03:04:51 MST 2008

Dear All,
This article by Michael Greaney recounts, among other things, how an advocate (Costa Rica Minister of Planning, Otton Solis) of ESOPs -- Employee Ownership Plans -- gets described by Time magtazine as "a socialist-supported leftist."  

Isn't it incredible how the American view of democracy and the free market always ensures that most people do not have productive capital ownership?

Rodney Shakespeare

> Politics in Latin America
> 
> 
>  After 12 left-leaning Latin Americans won presidencies from November
>  2005 through 2006, how will the 21st-century Socialism movement affect
>  the region in the future?
> 
> <http://www.helium.com/tm/855391/after-communism-dissolution-soviet>
> 
> 
>        by Michael Greaney <http://www.helium.com/user/show/371892>
> 
> After the fall of communism and the dissolution of the Soviet Union in 
> the final years of the 20th century, capitalist pundits loudly 
> proclaimed the "victory" of capitalism. From the presidency of Ronald 
> Reagan to the pontificate of Pope John Paul II and his issuance of the 
> encyclical "Centesimus Annus" on the 100th anniversary of Leo XIII's 
> "Rerum Novarum" ("On Labor and Capital"), not to mention the economic 
> reforms that seemed to be taking place in Central and South America, 
> even China, everything seemed set for the coming of the capitalist 
> millennium.
> 
> It didn't take too long, however, for the backlash to begin - or at 
> least something perceived as a backlash. As noted in a Time magazine 
> article of 4/11/07, "Latin America's resurgent left has been a firebrand 
> when it comes to battling poverty, promoting indigenous rights or 
> bashing the U.S." The question, however, is how real is this perception? 
> American commentators, especially in the self-centered media, have 
> developed a talent for misunderstanding people in other countries as 
> well as Americans
> 
> As a case in point, during the recent election in Costa Rica, former 
> Minister of Planning Otton Solis was labeled "leftist," although he was 
> a firm supporter of private property rights for ordinary people and 
> advocated privatizing many of the State-owned enterprises ("Defending 
> the State, Empowering the People: An Interview with Otton Solis," The 
> Multinational Monitor, September, 1996). As Minister of Planning for 
> Costa Rica in the 1980s, he initiated a project to develop Employee 
> Stock Ownership Plan or "ESOP" legislation under a USAID contract. For 
> this, Time magazine characterized Solis as a socialist-supported leftist 
> in a 3/8/06 article.
> 
> Nevertheless, there is cause for concern. Many Caribbean countries have 
> maintained diplomatic and cultural ties with Cuba. Increasingly, noting 
> that the electorate is evidently fed up with the growing disparities in 
> wealth that increasingly characterize world economies, candidates for 
> public office throughout Latin America have promised increases in 
> State-funded benefits to secure election. With the growth in China's 
> economic and financial clout, newly-elected leftist heads of State have 
> established closer political and economic ties with China, causing 
> Washington to take a closer look at the situation (Hispanic Vista, 5/21/06).
> 
> Still, this may be due more to China's increased economic strength and 
> the declining position of the United States than to the usual suspicion 
> with which many in Latin America regard "the Colossus of the North." 
> Yes, Cuba's Fidel Castro and Venezuela's Hugo Chavez have gained a lot 
> of ground in places like leftist Bolivia and even "conservative" 
> Columbia, but have a somewhat more equivocal position in places like 
> Argentina, Chile, and Brazil, which have also elected left-leaning heads 
> of State. These countries clearly seek to maintain friendly relations 
> with the United States. (Havana Journal, 6/11/06)
> 
> The election of socialists to high office in Central and South America, 
> while puzzling to capitalist cheerleaders, is perfectly understandable - 
> and is due in large measure to the sort of reforms pushed by the United 
> States that do little to address critical underlying problems. The 
> electoral revolution was further assisted by the fact that, all things 
> considered, there is very little difference between capitalism and 
> socialism as far as the ordinary person is concerned. Both rely on the 
> wage system as the primary means by which the bulk of the population 
> gains its income. Both concentrate ownership of the means of production: 
> capitalism in the hands of a small private elite, socialism in the hands 
> of a relatively small bureaucratic elite. Both (despite all the rhetoric 
> to the contrary) view the individual ordinary worker as fungible, 
> something that can be replaced when worn out, increases in cost, or a 
> reasonable and cost-efficient substitute becomes available.
> 
> Driven to desperation by the failure of one system, people switch to the 
> other. They little realize that the basic problem is not the honesty or 
> the corruption of the people running the system, the objective (and 
> non-existent) advantages of one system over the other, or anything 
> except the fact that in neither system are ordinary people empowered 
> with direct and significant ownership of the means of production. As 
> Daniel Webster stated in 1820, "power naturally and necessarily follows 
> property." Whether capitalism or socialism, then, ordinary people are 
> left powerless because they lack property in the means of production.
> 
> Humanity will probably never achieve the "perfect" economic system where 
> all drudgery work is eliminated and everyone is free to do the work he 
> or she loves. It becomes imperative, however, for transforming economies 
> - whether capitalist to socialist or vice versa - indeed all the nations 
> of the world, to implement effective programs of expanded ownership of 
> productive assets. The alternative is a pendulum swing between 
> capitalism and socialism (or their various permutations), where any 
> period of stability merely serves as preparation for the next "reform."
> 
> Nowhere is this more evident than in Central and South America, where 
> over the past five years there has been a significant backlash against 
> free market reforms. As noted, much of this may have been the result of 
> well-intentioned, but misdirected efforts on the part of the United 
> States. American foreign aid may have helped to pave the way for many of 
> the Marxist revolutions and expropriations of privately owned 
> enterprises that occurred throughout Asia, Africa, and Latin America 
> since World War II, and the misdirected efforts to reorient the 
> economies along more free market lines.
> 
> Handouts by themselves do not deliver justice, nor do they create a more 
> just social order. Because the underlying corrupt system remains in 
> place without any power going to ordinary people, the influx of foreign 
> development funds usually increased the already-wide gap between the 
> rich and the poor. This only succeeded in alienating the people such 
> efforts were intended to help. It also magnified the obvious difference 
> between the rich and the poor: that the rich derive their incomes from 
> the ownership of capital, while the poor lack effective access to 
> capital ownership.
> 
> Handouts and the subsequent disparities between the rich and the poor 
> created the perfect political and social conditions for a return to 
> socialism. Like military aid, foreign aid that does not reform the basic 
> flaws in the system is at best a temporary expedient. It may be useful 
> for buying time to attack the social and economic causes that lead to 
> revolution, but by itself does nothing to restructure the system. By not 
> providing the poor in Latin America with the means to become partners in 
> free enterprise growth, the United States wasted resources and lives to 
> no good purpose.
> 
> Unless the assumptions and basic approach underlying American foreign 
> policy in Central and South America are changed, the ordinary people of 
> Latin America can only expect more of the same. Socialism at least has 
> the advantage of making most people equally miserable, the ugly vice of 
> envy keeping the extravagances of the powerful under wraps or at least 
> under control.
> 
> There is, however, hope. In 1986 the broadly bipartisan Presidential 
> Task Force on Project Economic Justice appointed by President Reagan 
> detailed a proposal to deliver justice to the people of the Caribbean 
> and Central America by sponsoring a program of widespread direct 
> ownership of the means of production. The plan is still viable, and 
> remains financially and politically feasible.
> 
> Project Economic Justice was based on "four pillars" of an economically 
> just society:
> 
> 1) Limited economic role for the State,
> 2) Free and open markets,
> 3) Restoration of the rights of private property, particularly in 
> corporate equity, and (what most reform proposals omit)
> 4) Widespread direct ownership of the means of production.
> 
> A similar program called "capital homesteading for every citizen" (from 
> the book of the same title) has been developed for use in the United 
> States, itself plagued by an increasing gap between the rich and the 
> poor, declining heavy industry, and the flight of jobs and capital to 
> other countries. Basic economic laws and institutions largely determine 
> who had access to own the wealth-producing technology, rentable space, 
> critical infrastructure, and other assets of our free enterprise system 
> in the past. This, however, leaves unanswered the question as to who 
> will own and receive the growth profits when new and more productive 
> capital assets are added to the existing capital pie?
> 
> Answering this critical question, capital homesteading provides a 
> comprehensive blueprint for real change. The reforms would radically 
> simplify and reform tax, money, and credit systems throughout the 
> Americas. This would level the playing field so that every man, woman, 
> and child would have the same access as the wealthiest people to 
> accumulate a meaningful income-producing ownership stake in the future 
> growth of the western hemisphere.
> 
> As President Reagan stated in his speech to the members of the 
> Presidential Task Force on Project Economic Justice on August 3, 1987, 
> "I've long believed one of the mainsprings of our own liberty has been 
> the widespread ownership of property among our people and the 
> expectation that anyone's child, even from the humblest of families, 
> could grow up to own a business or corporation."
> 
> The means to establish and maintain economic and social justice 
> throughout the Americas exists. All it requires is leaders with vision 
> to seize the opportunity.
> 
> Learn more about this author, Michael Greaney 
> <http://www.helium.com/user/show/371892>.
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